Chief Economist

It is totally different What is happening in much of the developed countries. In England, public debt is currently located about 54.8% of its GDP. For the worse, the projections for 2010 anticipate that gross public debt in England will reach 66.9% of GDP. But if you are concerned about the volume of debt of England, I must tell you that still does not tell them the worst. Let’s take a breather and see these numbers of public debt to GDP arising from IMF Statistics: France has a public debt of 74.9% (80.3% is expected in late 2010), Germany 79.4% (86.6% for 2010), Italy 115.3% (121,1% for 2010), U.S. 86,98% (97.5% for 2010) and Japan 217,2% (and 227,4% in 2010).

The increase in public debt in developed economies has been really amazing. In an article in five days, Marcos Ezquerra says the amazing case of Spain which has come to have a debt of 36.2% of GDP in 2007 to the current level close to 60% in terms of the product. Does may think that these levels of? debt are sustainable? The reputation that the developed economies have gives them by the time margin to coexist with these levels of debt that had been unleashed already same a crisis in emerging economies. But the reputational capital that have economies is ephemeral and should be reinforced with an urgent change in fiscal policy which tends to reverse deficits urgently. Kenneth Rogoff, who was Chief Economist of the IMF, were encouraged to anticipate the next crisis: is very likely that the public debt will be the trigger for the next crisis.

The Governments of developed countries are currently in a tough crossroads. The warnings made by personalities like Rogoff collide with the need to keep an expansionary fiscal policy to sustain the economic recovery. A fiscal policy that seeks to narrow the deficit can lead to economies to reverse the recovery to return to a recessive context. In this context takes higher value order of Obama addressing global imbalances and ask for a greater commitment to countries like China that have the capacity to contribute to global equilibrium. I imagine that it will have to wait until 2010 where the recovery has begun to gain strength to know what direction take the developed countries in the management of fiscal policy. While the coordination of policies at the international level would be the best result, at least I believe that any signs of fiscal discipline by most committed economies would be positive. A final reflection: the man is the only animal that stumbles twice (and many more) with the same stone. As if were bunnies of india, underdeveloped countries warned with her past experience, many of the situations that are going through the developed world that has failed to capitalise on the experience person. Arrogance or inability? When will suggest them the IMF these economies that take care of the fiscal discipline as it did with Latin American countries? Horacio Pozzo OPPORTUNITY of investment advantage of this crisis to buy. How did the subscribers of our newsletter of investment overall value, than already recovered its cost by investing in companies that we recommend. Do you want to know what? You can try entering here to find out and start investing in our recommended actions that carry 60% of suba. Soon leave the October! You can write me at or for more details. Original author and source of the article.